Nudge Theory

“Guns don’t kill people; people kill people” – a refrain repeated by the US National Rifle Association as it fights off any attempts to regulate the cheap availability of powerful firearms in the US.

The implication is clear: there is no need to reduce gun sales or tighten gun laws. Individual people are the problem, not the firearms industry. And the PR tactic of blaming the individual not the ‘system’ isn’t restricted to firearms. It is remarkably widespread.

A particularly striking example concerns carbon emissions. Hundreds of millions of pounds have been spent by BP on a vast media campaign which charged individuals with tracking their carbon footprint (including creating a widely-used personal carbon footprint calculator).

The idea of personal carbon footprints has definitely caught on with campaigners, governments and the media.

This sounds like a positive step for the climate - unless we suspect that the real goal is placing responsibility for global warming squarely on the shoulders of the individual, and not on the fossil fuel companies.

The prevalence of the tactic is particularly alarming for those in the behavioural sciences, including myself, who mostly look at social and political problems from the point of view of the individual.

Why do we need nudging in the first place?

Aren’t we “blaming the individual” just as the opponents of government action hope? Indeed my friend and long-time collaborator George Loewenstein and I argue in a recent paper that we, and many fellow behavioural scientists, have unwittingly fallen into exactly this trap.

Emphasizing individual responsibility, and exploring how individuals can be ‘nudged’ to make better decisions, ignores the bigger picture: the systems that cause the problems in the first place, and how these need to be reformed.

The focus on helping the individual has been gathering pace for a while. There has been increasing interest in informing consumers (putting calorie labels on food), disclosing conflicts of interest, asking permission (e.g., all those legal disclaimers we tick when navigating the internet; better patient information).

And most significantly there have been adjustments to the ways in which choices are made (e.g., opting out vs opting in to green energy, or organ donation; or being told not just how much you spend on energy, but how much your neighbours spend).

These “nudges” try to help people make better health, environmental or financial choices but leave the “system” intact.

George and I have been enthusiastic supporters of these developments, which were given a big boost by David Cameron’s government, with the hope that these measures would be cheap, politically uncontroversial, and effective. But as we argue in our paper, focusing on the “fixing” the individual tends to be disappointingly ineffective.

A lot of nudges don’t really change behaviour substantially at all (an average impact may be 1 per cent or so, but with huge variation); and changes often quickly fade (smart meters are put in draws, gym memberships lapse).

Even when behaviour does shift, it doesn’t always address the underlying problem.

A good example is recent studies in which people are nudged into choosing green energy by making this their “default” tariff. They can opt out of the more expensive “green” tariff, but most don’t bother.

This may sound promising, but it has no real impact on the supply of clean energy. It mainly shifts the supply of clean energy from one set of consumers to another.

Worse still, signing up can convince individuals they’ve done their bit for climate change, and reduce appetite for more painful choices, such as a carbon tax.

But we’ve been looking down the wrong end of the telescope. Most of our behaviour is heavily influenced by the ‘systems’ we live and work within.

The first goal of behavioural science in public policy should surely be to help citizens lobby for, and to help governments implement, the right system-changes (new laws, regulations, taxes and incentives) to address society’s ills.

Stepping back to look at how things have changed gives a powerful clue that individuals aren’t the problem.

Take obesity: people have grown increasingly obese across many parts of the world in the last few decades because of the flood of cheap, calorific, over-processed food, not because of any reduction in self-control.

Or plastic pollution: the countryside, and oceans, are increasingly awash with plastic because of the explosive rise in plastic packaging – rather than because we have suddenly become less careful in how we dispose of litter.

The trouble with blaming the individual

Problems are created by systems rather than by individuals. But, with some exceptions, recent government policies shy away from regulation, and pass responsibility to the consumer---an approach that is very unlikely to work.

But if behavioural science has often been misdirected, it still has a crucial role to play in helping design and gather support for more effective system change.

One success-story is a traditional tax—but a very modest one: the plastic bag tax. While efforts since the 1970s to persuade people to use fewer bags have proven all but useless, very small taxes have dramatically reduced usage. Why?

Surely these tiny taxes should be too small to make a difference. The answer is that the tax is cleverly designed to focus on losing 5p - and people hate losses; but more important is the symbolic significance of the tax. We’ve all seen enough David Attenborough documentaries to know that plastic waste needs to be reduced—and most of us want to play our part.

So the small charge acts as a reminder to help us do something we feel we (and others) ought to be doing---so the charge is mostly greeted with acceptance rather than outrage.  The tax sends the right symbolic message and aligns with our sense of what is reasonable and fair.

A far bigger challenge is creating a carbon tax which the public can get behind. Here, understanding individual behaviour—and especially how people decide what is fair---can make or break a policy.

A pioneering carbon tax introduced 2014 by British Columbia has won support from citizens and industry. It’s a clever design – funds are levied and then redistributed to the population.

Were it to have been billed as a fundraiser for government, it would probably have been disastrous. But given sufficient public acceptance of the environmental cost of carbon, people can be willing to take the rap – knowing that there will be both winners and losers.

What’s the solution?

George and I have been involved in climate policy discussions with governments for years. I’ve been particular keen on novel ways to inform people about their carbon footprints especially vividly, to help nudge each of us to make better choices.

But the real action, we now realise, is in systemic change – houses must be insulated, gas boilers replaced by heat pumps, electricity decarbonised, electric vehicles subsidised, and charging infrastructure improved. There is no way to wriggle out of difficult and complex policy choices.  

As well as policy design, behavioural science can play a role in how policies are formulated – policy makers are fallible after all, and prone to overconfidence, conformity, groupthink, short termism and more. How can you design policy making to mitigate against those traps?

One strategy is to build an adversarial system. Just as banks might bring in ‘white hat hackers’ to test system security, perhaps policy makers need separate teams who are actively trying to pick holes in policy proposals.

This could prompt more original thinking and combat a desire to conform, and ultimately result in more robust, ingenious policies.  But we need, more broadly, to be thoughtful—and creative---in designing systems that allow people to correct each other’s mistakes and create the best possible policy ideas.

The science of individual behaviour matters hugely for good public policy---but not, primarily, to help us nudge individuals to behave “better.”

Urgent social problems need radical policy action—and whether that policy succeeds or fails may depend on whether it goes with, or against, the grain of human nature.

Further reading:

Chater, N. and Loewenstein, G. 2022, The i-Frame and the s-Frame: How Focusing on Individual-Level Solutions Has Led Behavioral Public Policy Astray, SSRN.

Chater, N. 2022, What is the point of behavioural public policy? A contractarian approach, Cambridge University Press.

Nick Chater is Professor of Behavioural Science and teaches on The Warwick Executive Diploma in Behavioural Science. He also lectures on the DBA, and teaches Behavioural Sciences for the Manager on the Executive MBAExecutive MBA (London), and the Distance Learning MBA. He also teaches Judgement and Decision Making on MSc Accounting & FinanceMSc Business & FinanceMSc Finance, and MSc Finance & Economics. Plus, he lectures on Big Data Analytics on MSc Global Central Banking and Financial Regulation..

Follow Nick Chater on Twitter @NickJChater.

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